New powers of attorney - what you need to know

On 1 September 2015, new powers of attorney came into effect in Victoria.

Here are some of the key changes:

1. Enduring Power of Attorney
   
   There is now a form called an “Enduring Power of Attorney”. This new form is a combination of the old Enduring Power of Attorney (Financial) and Appointment of Enduring Guardian. You can now appoint your attorney to deal with financial matters and personal matters in the one document.
   
   It is important to note that any Enduring Power of Attorney (Financial) and Appointment of Enduring Guardian entered into before 1 September 2015 will remain valid and continue to have effect.
   
   The Enduring Power of Attorney (Medical) is not affected and will continue to operate in its current form.
   
   The General Power of Attorney continues to exist but has been renamed a “Non Enduring Power of Attorney”.

2. Witnessing requirements
   
   The signing of an Enduring Power of Attorney must be witnessed by two people. One of the witnesses must be either a person who is authorised to witness the signing of affidavits or be a medical practitioner.
   
   Previously, the old forms only required one of the witnesses to be authorised to witness statutory declarations.
   
   None of the witnesses can be related to the principal or the attorney. Nor can the witnesses be a care worker or accommodation provider for the principal.
   
   Attorneys appointed are still required to sign a statement of acceptance but this now must be witnessed by someone over 18 years of age.
    
3. Supportive Attorney
   
   A new type of power of attorney is now available. A person can appoint a “supportive attorney” to assist them in making decisions. The supportive attorney can:
   
   1.    access, collect or obtain information to assist making a decision;
   2.   communicate information on behalf of the principal that is relevant to the making of or giving effect to a decision; and
   3.   do anything that is reasonably necessary, to give effect to a decision.
   
   Importantly, the supportive attorney can only act while the principal has decision making capacity.
   
   A principal may appoint a supportive attorney to act while they still have decision making capacity and when they lose decision making capacity, have an enduring power of attorney come into effect.
    
4. Conflict transactions
   
   The concept of “conflict transactions” has been introduced.
   
   An attorney for financial matters cannot enter into transactions where there is or may be a conflict between the duty of the attorney to the principal and the interests of the attorney, a relative, a business associate, or a close friend of the attorney.
   
   A number of transactions that would otherwise be a conflict transactions are permitted such as certain gifts and payment to maintain dependants of the principal.
   
   The principal can authorise the attorney to enter into a specific conflict transaction or conflict transactions generally. If the principal has lost decision making capacity, VCAT can validate a conflict transaction either during or after the completion of the transaction.
    
5. Tougher penalties for abuse
   
   It is now easier to pursue attorneys for breaching their duties. The Supreme Court or VCAT can order an attorney to compensate a principal where loss is caused due to a breach of their duties. Applications for compensation can also be pursued after the principal has died.
   
   Civil and criminal penalties for misuse of an Enduring Power of Attorney have also been introduced. The penalties include a fine of up to $91,000 or up to five years imprisonment.

Justin Hartnett
Principal
Harwood Andrews
T: 03 5225 5220
E: jhartnett@harwoodandrews.com.au

Jenny Orchard
Principal
Harwood Andrews Bendigo
T: 03 5430 3888
E: jorchard@harwoodandrews.com.au

Andrew Robson
Principal
Harwood Andrews Ballarat
T: 03 5329 6920
E: arobson@harwoodandrews.com.au

Sarah Cohen
Associate
Harwood Andrews
T: 5226 8574
E: scohen@harwoodandrews.com.au